HRNEWS
Magazine    Revista

TORONTO, ONTARIO--(Marketwire - May 25, 2012) - VersaPay Corporation (TSX VENTURE:VPY) ("VersaPay" or the "Company"), a provider of merchant credit and debit card payment processing and e-mail money transfer (EMT) solutions, today announced its financial and operational results for the three month ended March 31, 2012. All amounts are in Canadian dollars unless otherwise noted.

Q1 2012 Highlights

• Completed an equity financing for gross proceeds of $2.07 million
• Grew year over year revenues by 19% and grew recurring revenues by 21%
• Adjusted EBITDA¹ was $(0.2) million, despite continued investment in VersaPay's electronic invoice presentment and payment platform
• Announced new partnerships, including Hockey Canada, Wave Accounting, and Zen Planner

Q1 2012 Financial Summary2
	Three months ending March 31
	2012	2011
Recurring Revenues3	$3.9M	$3.2M
Non-recurring revenue4	$0.01M	$0.08M
TOTAL Revenue	$3.9M	$3.3M
Cash Operating Expenses5	$1.0M	$0.9M
Adjusted EBITDA1	$(0.2)M	$(0.2)M
Loss from continuing operations	$(0.3)M	$(0.3)M
Cash	$2.1 M	$0.6 M

"We are very pleased with our financial and operational results for the first quarter of 2012. Our revenue growth in the quarter highlights the benefits of our recurring revenue business model," said Bill McGill, CEO of VersaPay. "Based on the seasonal trends that we have historically seen in our business and the opportunities that we are building in our pipeline, we believe that we are well positioned to build on the strength of this quarter. In addition, by completing the equity financing that was closed in the first quarter, we have the financial flexibility to continue to invest in our EIPP business as a key driver of future growth."

Q1 2012 Financial Review

Total revenues for Q1 2012 increased 19% to $3.9 million from $3.2 million in Q1 2011. Of this amount, recurring revenues for Q1 2012 increased 21% to $3.9 million from $3.2 million in Q1 2011. The year-over-year improvement was driven primarily by growth in the Company's transaction processing fees.

Cash operating expense (excluding amortization and share-based payments) increased to $1.0 million from $0.9 million in Q1 2012 from the same period 2011.

Adjusted EBITDA for Q1 2012 was $(0.2) million, and is consistent with Q1 2011 of $(0.2) million.

Loss from continuing operations for Q1 2012 was $(0.3) million. This compares to a loss from continuing operations of $(0.3) million for Q1 2011.

¹ Adjusted EBITDA is defined as Earnings Before Interest, Taxes, Depreciation, Amortization and Share-based payments. See table A.

² A complete set of financial statements and notes and MD&A for the year ended December 31, 2011 will be available on the Company's website at www.versapay.com and on SEDAR.

³ Defined as Transaction processing fees + VersaCard/EMT fees

⁴ Defined as Product sales (point-of-sale devices) and other

⁵ Defined as operating expense excluding amortization and share-based payments

Table A
	Three months ending March 31
	2012		2011
Adjusted EBITDA1	(196,324	)	(162,959	)
Stock-based compensation	(25,154	)	(51,165	)
Interest expense	(39,149	)	(35,172	)
Amortization	(43,815	)	(46,400	)
Loss from continuing operations	(304,442	)	(295,696	)

About VersaPay

VersaPay's financial technology enables businesses and consumers across Canada to accept and process credit, debit and gift card transactions. As a payment services and financial technology company serving more than 2,500 Canadian businesses, VersaPay, in conjunction with its partners, provides the hardware, technology, infrastructure and support services that businesses of all types require to accept and process electronic payments from their consumers and clients.

While its core business is payment processing services, VersaPay also provides enhanced financial technology solutions such as VersaPay EMT - the Company's proprietary Electronic Bill Presentment and Payment solution - which enables merchants and consumers to easily transact with one another.

VersaPay is headquartered in Vancouver, Canada and has operations in Toronto and Montreal. To learn more about VersaPay, visit http://www.versapay.com.

Forward Looking and Other Cautionary Statements

This news release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company's current expectations. When used in this news release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology, are intended to identify forward-looking statements and information. Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks relating to the speculative nature of the Company's business, the Company's formative stage of development and the Company's financial position. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward looking statements if these beliefs, estimates and opinions or other circumstances should change.

Investors are cautioned against attributing undue certainty to forward-looking statements. There are a number of important factors that could cause the Company's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others, risks related to following: the Company's financial position and the potential need for future financings, the ability of the Company to maintain its relationship with its strategic partner for payment processing, the efforts and abilities of the senior management team, the ability of the Company to attract and retain skilled management, competition in the payment processing industry, and the Company's ability to respond to technological change and protect its intellectual property rights.

The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. There can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE SECURITIES LEGISLATION.

	March 31, 2012		December 31, 2011
	$		$
ASSETS
Current
Cash and cash equivalents	2,139,998		559,497
Funds held for merchants	864,167		443,005
Receivables	450,629		417,154
Prepaid expenses	20,288		28,685
	3,475,082		1,448,341
Non-current
Equipment	382,985		397,530
Intangible assets	82,925		97,564
	3,940,992		1,943,435
LIABILITIES
Current
Accounts payable and accrued liabilities	371,875		535,741
Funds due to merchants	864,167		443,005
Current portion of obligations under finance lease	46,602		53,026
	1,282,644		1,031,772
Non-current
Obligations under finance lease, net of current portion	42,690		52,872
Promissory note	588,753		576,569
Total liabilities	1,914,087		1,661,213
EQUITY
Share capital	9,908,992		7,891,062
Reserve	1,359,751		1,010,525
Warrants	372,260		690,291
Deficit	(9,614,098	)	(9,309,656	)
Total equity	2,026,905		282,222
Total liabilities and equity	3,940,992		1,943,435

			Three months ended, March 31
			2012			2011
			$			$
Revenue
	Transaction processing fees		3,834,879			3,173,079
	Product sales and other		13,363			78,720
	VersaCard/EFT and EMT Fees		75,792			57,184
			3,924,034			3,308,983
Expenses
	Cost of services		2,723,968			2,233,470
	Cost of products sold and other		360,693			396,738
	VersaCard/EFT and EMT costs		37,683			26,549
	Depreciation and amortization		43,815			46,400
	Bank charges and interest		39,149			35,172
	Consulting fees		93,653			14,850
	General and administrative		126,651			95,811
	Marketing and promotion		22,599			38,303
	Professional fees		88,540			70,099
	Rent and occupancy		88,374			71,571
	Research and development		74,971			9,640
	Salaries and benefits		421,846			422,911
	Share based payments		25,154			51,165
	Telecom and wireless connection fees		62,419			69,150
	Travel		18,961			22,850
			4,228,476			3,604,679
Loss from operations			(304,442	)		(295,696	)
Net loss and comprehensive loss for the period			(304,442	)		(295,696	)
Loss per share
Basic		$	(0.02	)	$	(0.02	)
Diluted		$	(0.02	)	$	(0.02	)
Weighted average number of common shares outstanding, basic and diluted			13,130,381			12,943,197

		Issued											Total
		Capital		Reserve			Warrants			Deficit			Equity
As at December 31, 2011	$	7,891,062	$	1,010,525		$	690,291		$	(9,309,656	)	$	282,222
Net loss for the period		-		-			-			(304,442	)		(304,442	)
Shares Issued		1,780,202					54,269			-			1,834,471
Exercise of options		237,728		(48,228	)		-			-			189,500
Share based payments		-		25,154			-			-			25,154
Warrants expired				372,300			(372,300	)					-
At March 31, 2012	$	9,908,992	$	1,359,751		$	372,260		$	(9,614,098	)	$	2,026,905
		Issued											Total
		Capital		Reserve			Warrants			Deficit			Equity
As at December 31, 2010		7,423,002		865,645		$	696,619			(7,990,233	)	$	995,033
Net loss for the period		-		-			-			(295,696	)		(295,696	)
Exercise of options		72,060		(55,060	)		-			-			17,000
Share based payments		-		51,165			-			-			51,165
At March 31, 2011	$	7,495,062	$	861,750		$	696,619		$	(8,285,929	)	$	767,502

			Three months ended, March 31
			2012		2011
			$		$
Cash Provided By (Used In) Operating Activities
	Net loss for the period		(304,442	)	(295,696	)
		Items not affecting cash:
		Depreciation of equipment	29,177		32,440
		Amortization of intangible assets	14,638		13,960
		Interest accreted on promissory note	12,184		9,158
		Share based payments	25,154		51,165
	Change in non-cash working capital items
		Receivables	(33,475	)	7,028
		Prepaid expenses	8,397		936
		Accounts payable and accrued liabilities	(163,866	)	(49,541	)
			(412,233	)	(230,550	)
Cash (Used in) in Investing Activities
	Acquisition of equipment		(14,632	)	(11,739	)
			(14,632	)	(11,739	)
Cash Provided by (Used In) Financing Activities
	Issuance of common shares, net of issuance costs		2,023,972		17,000
	Finance lease payments		(16,606	)	(12,058	)
			2,007,366		4,942
Increase (decrease) in cash and cash equivalents			1,580,501		(237,347	)
Cash and cash equivalents, beginning of period			559,497		1,121,816
Cash and cash equivalents, end of period			2,139,998		884,469